How the DC-NY Axis of Evil Screws Ordinary Americans

Rising government debt creates more money, diluting our purchasing power and our savings

“To finance the government deficit, the Treasury now sells bills and bonds at a rate of about $120 billion a month, or about $1.5 trillion per year. But this new Fed-created money, which finances the government deficit, is not associated with any production of new goods and services. Thus, total monetary demand, or purchasing power, exceeds the existing supply of goods, equities, and services at prevailing prices, with the predictable result that prices rise."

Inflation enriches the fatcats...

At home, bankers and speculators have been and are the first in line, along with the Treasury, to get zero interest money and credit from the Fed. They are first to get bailed out. Then with new money, they finance stocks, bonds, and commodities, anticipating, as in the past, a Fed-created boom.

Being first in line has its advantages.  So the fat cats get the new money first, before the inflationary effects kick in, giving them maximum purchasing power...

Prices rise first for the most volatile goods, especially stocks, commodities, and financial claims, because they are relatively liquid vehicles for speculators and banks. This is the story of the past two years, with stocks and commodities advancing amidst a sluggish U.S. economy. This is also the story of postwar Fed-created booms. Each cycle experiences an inflation boom, often in different assets, e.g., Internet stocks in the late ’90s and real estate in the last boom and bust.”

After the fat cats have their investments safely locked away, the inflation trickles down to the rest of us, eroding our purchasing power and our savings.  Yeah, you can buy into the bubble, but the previously steep curve is already starting to dampen by the time your average Joe Schmo has a chance to get in on it.

But middle-income professionals and workers, on salaries and wages, and those on fixed incomes and pensions, are impoverished by the very same inflationary process that subsidizes speculators and bankers. Those on fixed incomes will likely earn very little or even a negative return on their savings. Thus, they save less.

It’s a rigged game, and those manipulating OUR US Currency control the game…

The inequality of wealth and privilege in American society is intensified by the Fed-induced inflationary process.

The subsidized banking and financial community, along with the chaos of floating exchange rates and an overvalued dollar, underwritten by China and other undervalued currencies, has submerged the American manufacturing sector, dependent as it is on goods traded in a competitive world market. 

In a word, the government deficit and the Federal Reserve work hand in hand, perhaps unintentionally, to undermine the essential equity and comity necessary in a democratic society. Equal opportunity and the harmony of the American community cannot survive perennial inflation.

We can dream of demolishing the Fed’s printing presses, or we can demand that the dollar again be pegged to something tangible, like gold, and convertible upon demand.  Or you can just sit there while your savings is stolen by the government.

All quotes taken from Lewis E. Lehrman's Weekly Standard article, Fiat Money, Fiat Inflation.

For those of you who do not understand currency and what the fed is doing, read this very informative article by Seth Lipsky, The Floating Dollar as a Threat to Property Rights. He does a great job breaking it down for us non-economists.